How Do You Ensure Quality Tenants?

Question

I know there are a variety of screening practices used by landlords and property management companies. Personally, I follow this standard for every application I receive:

- Income of at least 3 times the monthly rent (verified through the employer)
- Credit score of 580+
- Rental verification with past landlords (no outstanding balances, no late payments, and the property left in acceptable condition)
- No history of collections, evictions, or criminal offenses
- No overdue debt (except medical debt)

This process has helped me place quality tenants over the years. Does your screening process look similar? Are there additional steps you take when screening applicants, or do you take fewer steps? I’d love to hear your input!

Ke Nan Wang · Answer

One thing I've learned from my experience is that I do not set hard rules. I used those as my guidelines and I list them in the description. But I also put an caveat, "negotiable with more security deposit down."

There are all types of people in this world, many people have different stories. I've seen people who meet everyone of my qualifications and turned out to be night mare tenants and also people who missed the mark of certain criteria and turned out to be my golden tenants.

So I never turned people away simply because they don't meet one or two criteria. People need place to live, I and my investors need to safeguard my investment. As long as I understand the risk and mitigated the risk with sound exit strategies, I can let people live in my properties and I haven't had any losses yet. What I do gain is being able to place tenants much faster than my competitors who simply follow a mold.

One more thing, especially for people who don't meet my criteria, besides more deposit is required, I also do a interview with them, not interrogation style, more like a friendly conversation to figure out their situation. I look for behavior tell tale signs.

This is a more advance tenant placement tactics people who lack the experience or with an innocent mind can't read others properly should do more often before they relying on their read.

Along with that, you also need to round off the front end with a back end. You need a skillset that you can manage tenant's expectations and enforce the lease with a professional but firm manner. Have a sound judgment when is it okay to be flexible and when you need to be firm.

With my own properties I do that more. With investor's properties, depend on how risk averse they are, I fall under either just follow their criteria or maybe coach them my insight if I feel they are open to ideas. But I always leave the final decision to them so I'm not liable for their decisions.

Kyle Mccaw · Answer

@Alec Barnes

As the owner of a property management company in Texas, I completely agree that a solid screening process is essential for placing quality tenants. One critical aspect we focus on is identifying and preventing fraud. It’s astounding how many fake documents are circulating today—you can find everything from fake references and stolen Social Security numbers to falsified income documents.

To combat this, we rely on tools like Plaid, Verifast, and Snappt, which are excellent for verifying financial information and detecting fraudulent activity. These tools have been invaluable in helping us catch bad actors before they move in. If you’re not already using similar software, I’d highly recommend exploring these options—they can save you a lot of headaches down the road.

Drew Sygit · Answer

@Alec Barnes we use Debt-To-Income Ratio (DTI) instead of income = 3x rent.

Reason?

Which do you think a tenant will pay first - their car or rent payment?

If you said, "car", you're right.

In most states a car can be repossessed faster than a tenant can be evicted - and the tenants know this!

So, why would you NOT factor in a car payment when determining the liklihood of an applicant paying their rent consistently on time?

You also didn't state anything about how you verify income.

We get a YTD paystub (only need one!) and last year's W-2. We then average out their income.- We're also looking for consistent employment, which is needed for consistent income.

What are you doing to identify fake paystubs & W-2s?

Alec Barnes · Answer

I appreciate your response! I have not thought of using DTI instead of 3x the monthly rental amount in order to qualify an applicants income, but you made a great point regarding the priority that tenants might give a car payment. Is there a certain DTI ratio that you will usually consider acceptable for an applicant?

As for income verification, I require the applicants two most recent paystubs and if self employed I need their most recent tax return. To avoid scammers and fraudulent paystubs, I contact the applicants place of employment directly to verify that the paystubs are accurate, the company is legitimate, and the duration of the applicants employment.

William J Anderson · Answer

Hello Alec,

Thanks for sharing your approach to tenant screening—it’s great to see how others manage this important part of the process. I’m still learning the ropes of property management, so I really appreciate the opportunity to exchange ideas.

At our property, we have a structured screening policy influenced by the Federal Fair Housing Act since our location falls under its scope. We aim to balance thoroughness with fairness to ensure compliance. Here’s how we handle applications:

• Income Verification: We require proof of income that’s at least three times the monthly rent, verified through six recent pay stubs and a detailed employment verification process. This includes contacting the applicant’s employer and speaking with their supervisor to confirm job stability, income, and reliability​. if the person has not been employed at their place of employment they would require a guarantor
• Credit Score and Debts: Applicants need a minimum credit score of 620, and while we review debts, medical debts are generally not disqualifying unless they impact overall financial health.
• Criminal History: We do review criminal history to ensure safety and security for our tenants, while remaining mindful of state and federal guidelines.
• Rental History: Positive references from past landlords, with no evictions or significant lease violations in the past five years, are essential. and we can see into the court system if they have an eviction judgement.
• Release of Information: We include a release form allowing us to verify employment and rental history directly, which helps us get a clearer picture of an applicant’s background.

This process has worked well so far, but I’m always open to improving. I’d love to hear your thoughts on striking the right balance between being thorough and adhering to fair housing practices.

Thanks again for starting this conversation—it’s incredibly valuable to learn from experienced property managers like you!

James Hampton · Answer

What does the past landlords say? What is their previous rental history like?I suggest using a service like Mayistay. It's difficult to see how a tenant will be after screened and signing a lease. However, a lot of concerns can be mitigated with looking at their past rental behavior in a lot of different settings. Most, if not all screening tools do not include a comprehensive rental screening with a renters prior rental rating like Mayistay.

Julia Lyrberg · Answer

Hi Alec,

I think these are great requirements to help secure quality tenants!

Taylor Kendrick · Answer

That sounds really interesting. Have you discussed these 15 factors in any of your own content or perhaps on a podcast somewhere I could learn more?

Nathan Gesner · Answer

We take a "whole person" approach. We measure against 15 different factors. Some are automatic denials, some are measured on a scale of 0 - 3. We add up the scores and get a total score that reflects the level of risk the applicant presents. If more than one person applies together, then we combine their scores for a group average. The lower the score, the higher the risk and the more we charge for a deposit. We will rent to higher-risk tenants, but they'll pay through the nose to mitigate our risk.

How Do You Ensure Quality Tenants?

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